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Is can you write off fuel on taxes a business expense?

TL;DR

Fuel expenses can generally be deducted as a business expense if they are directly related to business operations, but personal fuel use is not deductible.

Detailed Answer

Fuel costs are deductible when they are incurred for business purposes, such as driving to client meetings or transporting goods. The IRS allows you to deduct actual vehicle expenses, including fuel, or use the standard mileage rate, which covers fuel and other vehicle-related costs. However, commuting expenses from home to your regular place of business are not deductible. For mixed-use vehicles, only the business portion of fuel expenses can be deducted, requiring careful tracking of business versus personal use.

Where to Put It on the Tax Form

Schedule C, Line 9 for car and truck expenses, or Line 27a if using Form 2106 for employee business expenses.

Real World Example

A freelance photographer who drives to various locations for shoots can deduct the fuel costs associated with those trips. If they spend $1,000 on fuel for business purposes and $500 for personal use, only the $1,000 is deductible.

Calculation Required

A calculation is required for this deduction.

To calculate the deductible portion, track total miles driven and business miles driven. Divide business miles by total miles to find the business-use percentage, then apply this percentage to total fuel costs.

Audit Risk & Documentation Tips

Moderate audit risk. Keep detailed mileage logs, fuel receipts, and records of business trips. Use apps or a logbook to track mileage consistently and ensure documentation matches claimed deductions.

IRS Reference

IRS Publication 463 (Travel, Gift, and Car Expenses), IRS Publication 535 (Business Expenses), IRC §162.

Relevant Industries

FreelancersReal Estate AgentsConsultantsDelivery ServicesContractors

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Disclaimer: This is for informational purposes only and should not be construed as tax or legal advice. Always consult your tax advisor.

Page created on July 25, 2025

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